Thai Prime Minister Yingluck Shinawatra (right) speaks with her Indian counterpart Manmohan Singh as his wife Gursharan Kaur (left) looks on during a reception at Rashtrapati Bhaban (presidential palace) after the Republic Day parade in New Delhi on January 26th, 2012. Singh and Yingluck finalised a free-trade agreement during the visit. [Reuters]

Thai Prime Minister Yingluck Shinawatra on Thursday (January 26th) became the first female leader to grace India's Republic Day celebrations as chief guest since Britain's Queen Elizabeth in 1961.

Her two-day visit was significant for another, more substantial reason. It led to the finalisation of a framework for a free-trade agreement between the two countries which will be inked in June.

India and Thailand are near-neighbours, with only Burma between them. The two face each other across the Bay of Bengal. Yet the volume of bilateral trade has been negligible.

"Things have changed since 2011.We are now looking at doubling trade volumes from $7 billion last year to $14 billion in two years," Indian Foreign Secretary Ranjan Mathai told Khabar.

The joint statement issued at the end of the meeting between Prime Ministers Manmohan Singh and Yingluck was unusually long. It listed 32 areas of co-operation, including economic matters, security and defence, science and technology, culture, education and people-to-people exchanges.

India is not a member of ASEAN, while Thailand is. During her visit, Yingluck gave her support to New Delhi's aspirations for greater integration of its economy with the thriving Southeast Asian markets. The two leaders agreed to take forward a policy to form a broader "ASEAN community" along the lines of the European Community by 2015.

India's Commerce Minister Anand Sharma told Khabar that Indian and Thai companies would form economic partnerships once the FTA comes about.

"The Indo-Thai FTA will be separate from the Indo-ASEAN FTA which became effective in 2010 and has led to tariff elimination for 4,000 products," Sharma said. "This exclusive FTA with Thailand will include services."

India's "Look East" policy has taken important strides over the past year. Yingluck's predecessor, Abhisit Vejjajiva, set the ball in motion with a three-day visit to the Indian capital in April 2011. A visit by Japanese Prime Minister Yoshihiko Noda in December also led to landmark agreements on security collaboration.

According to C. Raja Mohan, senior fellow at the Centre for Policy Research, a leading think tank based here, the coming years will see India and Thailand collaborate in building what is expected to be the largest deep-seaport in Asia.

It is slated to be built in Dawei in southern Myanmar at a cost of over $50 billion. When completed, the port is expected to connect the economically robust regions of southern India and Southeast Asia.

Mohan told Khabar that India is engaged in parallel talks with the government of Myanmar on this project and the matter figured prominently during Myanmar's Minister of Foreign Affairs Wunna Maung Lwin's visit to New Delhi just two days ahead of Yingluck's.

Yingluck's visit also helped ease concerns about the use of Thai territory as a safe haven by terrorists operating against India, particularly insurgents from India's troubled northeast.

Leaders of groups fighting for secession from India have increasingly used Thailand as a safe haven because the Sheikh Hasina government in Bangladesh is making it difficult for them to find refuge in her country, said Wing Commander Ajey Lele, a fellow of the Institute for Defense Studies and Analysis, an Indian government think tank.

"The opening of security ties between India and Thailand, with the [addition] of an extradition treaty in future, could make Thailand less attractive as a safe haven for anti-India terrorist groups like the United Liberation Front of Asom," Lele told Khabar.

The two countries agreed to sign an extradition treaty and exchange intelligence on the operations of terrorists.